UK Arbitration Law

The Arbitration Act 1996

The Arbitration Act 1996 is the primary legislation governing arbitration in England and Wales, Northern Ireland, and (with modifications) Scotland. Section 1 of the Act establishes three general principles that inform its interpretation: the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; the parties’ freedom to agree on how disputes are resolved, subject only to necessary safeguards in the public interest; and the court’s limited role, with the principle of non-intervention in arbitral proceedings. The Act represented a significant modernisation of English arbitration law, codifying the common law in a comprehensive statutory framework designed to support London’s position as a leading centre for international arbitration. The Act’s structure reflects the UNCITRAL Model Law’s influence, though it was drafted to preserve distinctive features of English arbitration practice.

The Arbitration Agreement

Sections 5 through 8 of the Act define the arbitration agreement and establish its essential characteristics. An arbitration agreement must be in writing — a requirement satisfied by an exchange of written communications, by an agreement evidenced in writing, or by reference to written terms. The Act codifies the doctrine of separability in s 7: the arbitration agreement is treated as a distinct agreement from the main contract, so that the invalidity of the main contract does not automatically invalidate the arbitration agreement. Section 30 incorporates the doctrine of competence-competence, empowering the arbitral tribunal to rule on its own substantive jurisdiction, subject to the court’s ultimate supervisory power.

The Arbitral Tribunal

The parties are free to agree on the number of arbitrators. Where the parties do not agree, the default is a sole arbitrator under s 15(3). The court may exercise default powers to appoint arbitrators under s 18 where the parties’ appointment mechanism fails. Arbitrators enjoy immunity from civil liability under s 29 for acts done in their capacity as arbitrators, except where the act is shown to have been done in bad faith — an immunity that extends to the arbitrator’s employer and to arbitral institutions. The tribunal’s procedural powers are broad: under ss 30–32, the tribunal may rule on its own jurisdiction; s 33 imposes a mandatory duty on the tribunal to act fairly and impartially, giving each party a reasonable opportunity to present its case; and the tribunal has default powers to award interest, make provisional awards, and determine the procedure subject to the parties’ agreement.

The Award and Challenges

Sections 46 through 58 govern the award. The award must be in writing, signed by all arbitrators or a majority, and must state the reasons for the decision unless the parties have agreed otherwise. The award is final and binding on the parties by virtue of s 58. The Act provides three principal routes of challenge. Section 67 allows a party to challenge the award on the ground that the tribunal lacked substantive jurisdiction. Section 68 permits a challenge for serious irregularity on one of the exhaustive grounds listed in the section, including the tribunal’s failure to comply with its duty under s 33, exceeding its powers, or failing to conduct the proceedings in accordance with the agreed procedure. Section 69 allows an appeal on a point of English law, subject to either the parties’ agreement or the court’s permission, which may be granted only where the question substantially affects the rights of the parties, the tribunal’s decision is obviously wrong or the question is of general public importance, and it is just and proper for the court to determine the question. Enforcement of awards under s 66 is summary, with leave of the court required. The London Court of International Arbitration (LCIA) is the leading arbitral institution seated in London, administering both domestic and international arbitrations under its widely used rules.